Abstract
This paper looks into the organization structure of Chevron Corporation both at the home office as well as in the international division. It explains how the current organization structure is organized as well as that of the international division. The paper further discusses the various international strategies and business environment and its influence on the corporation organizational structure. It then recommends the changes that would be embraced to ensure growth and sustainability in a competitive energy industry as well as achieve its strategy and attain corporate mission.
Introduction
Chevron Corporation is a multinational energy corporation whose headquarters are located in the San Ramon, California in the United States. Chevron consists of two broad lines of operations namely upstream operations and downstream operations. The upstream operations are mainly concerned with exploration and production of crude oil and natural gas as well as liquefaction and transportation of liquefied natural gas. The downstream operations is mainly concerned with refining of crude oil into a variety of petroleum products, in addition, downstream operations also deals with marketing of both crude oil and refined products. The structure of an organization is very crucial in determining how such competitive such an organization is both locally and internationally.
The structure of an organization entails the different activities and functions within a business and how they are organized, their chain of command as well as information run among them. The organization structure indicates how the run of information occurs and how decisions are made based on the employees and the activities carried on by a corporation (Riemann, 2005). Organizations are continuously searching and re-organizing their structural which is the achievement of their goals. The Chevron Corporation have been able to adopt effective globalization strategies such as restructuring to enhance efficiency and increase revenue base.
The Current Organization Structure of Chevron’s Home Office
Chevron is a bureaucratic corporation which is made up of positions of ranks throughout the corporation. Chevron Corporation’s home office is located at its headquarters based in the San Ramon, California in the United States. The home office is headed by the chairman who is also the global chairman of the company. The chairman, John S. Watson is also the chief executive officer and also serves in the board of directors who are elected by the company’s stakeholders to aid in the process of decision making. Watson is supported by two vice presidents; one of the vice president is the chief financial officer (CFO), Patrick Yarrington while the second vice president is the chief technological officer (CTO), John W.McDonald. Chevron Corporation therefore has a hierarchical structure starting from the top management to the lowest level of employees in the organization.
Cooperate officers follow up the ladder after the chairman and the two vice presidents. The corporate officers are in control and management of the different branches or divisions within the organization which start from technology and service to health environment and safety (Chevron, 2013). The works within the organization, therefore, have special and different positions that make the employees feel that every bit of their effort counts and is equally important to the company. In any organization, the structure of that organization defines the attitudes, behaviors, depositions and ethics that create the work culture both internally and externally.
Internal Culture
The corporation works to attain as well as maintain productivity in all divisions of the company; which motivates the employees to nurture skills which they require to be successful in their job endeavors. Chevron operates a collaborative working with people in the divisions in teams of employees. The employees work and perform specific duties and their work experience and skills are enhanced through extensive training programs by the company. Currently the employees retain and update their skills and experience through on the job education programs which are provided to all employees in all divisions. The company also encourages employee productivity through compensation and benefits incentives which include salary increment and bonuses. This enables Chevron to attain and meet its set objectives and goals. These employee incentives also ensure that there is reduced employee turnover which is a positive indicator of a successful organization.
Division of Labor
The Corporation has organized its responsibilities on the basis of the bureaucratic structure and specialization of labor. At the highest level of command, the board of directors led by the chairman has the responsibilities of overseeing financial duties and acquisitions and mergers. The corporate officers are responsible for the management of their specific branches of Chevron. The employees of the specific branches have been trained to specialize in specific areas of work. This specialization encourages division of labor leaving the employees motivated and hence high productivity leading to growth of the corporation.
The Organizational Structure of the Company’s International Division
The corporation operates in over 180 countries either exploring or marketing oil, gas as well as power generation. Chevron keep with an external organization through a culture that basically deals with its subsidiaries as well as public investors. This organizational culture is possible through mergers and acquisitions of different international companies. The international division therefore expands the corporation’s enterprise growing its international division rapidly. This way the corporation works with the mergers and acquisitions and their employees managed and regulated from the head office in San Ramon, California.
One of the main mergers of Chevron Corporation was the one that took place between Chevron and Texaco, a big incorporated technology and energy corporation. Such a merger with Texaco exposes the Chevron Corporation’s organization structure and consequently as well as the organization culture. After the merger the Chevron Company got access of all Texaco’s resources ranging from geographical, financial resources to human resource which make up the employees who are part of the important organization structure. The mergers and acquisitions hence allow Chevron to expand geographically as well as financially without forgetting to factor in the human resources, which is the employees. This forms the international division organization structure of the Corporation.
Chevron’s International Strategy and Business Environment and Its Influence on Its International Organizational Structure
Acquisition and mergers
The corporation’s major international strategy is through mergers and acquisition. Chevron acquires other international companies that are in the line of energy through mergers as well as acquisitions. Through the mergers and acquisitions Chevron gains access to the resources of the new acquired companies ranging from financial to human resources. As a growth strategy the corporation has invested heavily in mergers and acquisition of other firms within the energy industry. This has several advantages such as increase in market share which boosts revenues consequently resulting to increased profits. The other merit for mergers is that it facilitates the firm’s capacity to produce products of superior quality that enables the firm to attract and maintain customers thereby achieving brand loyalty from customers (Helman, 2013).
Mergers and acquisitions also go a long way to enhance efficiency since they are able to benefit from economies of scale (Taylor & Weerapana, 2011). For instance, Chevron Corporation acquired atlas energy in a deal estimated to cost $ 4.3 million. Additionally, in a bid to venture into the lucrative chemical industry, Chevron partnered with Phillips Chemical Company LLC to create a company called CPChem. This has enabled the new outfit to gain access to many countries worldwide especially the ones that Phillips Company had established investments. The other joint ventures that Chevron Corporation has undertaken include Catchlight Energy LLC which came into existence due to joint venture from Chevron and Wayerhaeuser Company in the year 2008. Others include joint ventures with Petrobas, Thailand’s Star Petroleum Company and PDVSA from Venezuela.
Franchising
Through mergers and acquisitions, Chevron has been able to brace the global competition in the industry. It has developed three vibrant brands based on the company itself as well as its mergers to boost their revenues; these brands include Chevron, Caltex, and Texaco. This has seen the corporation grow over the years and has retail outlets and subsidiaries in six continents including Africa. Chevron Corporation has earned its name over the years due to its global presence and superior petroleum products. The corporation has become a household name and as a result uncountable petroleum stations in many countries of the world have been established under the name Chevron so as to benefit from the success associated with the name (Helman, 2013). It is obvious that the numbers of franchises are set to be on the rise because Chevron is still gaining grounds in many countries of the world. For instance, Angola an African country has almost more than half of its petrol stations using Chevron brand names strategically to boost revenues.
Research and Technology
Chevron Corporation is involved in exploration of energy resources and hence undertaking technology and research is inevitable. Research and Technology come in to offer better and cleaner energy and make them more affordable as compared to the offers from rival companies. In order to accomplish these goals Chevron has established energy Technology Company, information Technology Company as well as specialized in bio fuels and other energy applications. This influences on how its international structure is organized as it embracing research and technology within the international structure.
Recommendation
Chevron Corporation is a large energy producing corporation with a global influence; it has established base in six continents including Africa. With the impeccable managerial attributes of management team under the leadership of Chairman and CEO Mr. John Watson; the organization structure of the corporation has succeeded to adopt effective globalization strategies such as joint ventures and restructuring to enhance efficiency and increase revenue base. Other strategies such as franchising as well as research and technology promise to keep the company on top of its industry.
References
Reimann B.C. (2005). Dimensions of structure in effective organizations: Some empirical. New Jersey: John Willey and Sons
Taylor J. & Weerapana A (2011). Principles of Microeconomics, Cengage Learning.
Chevron (2013, July 12). Strategies | About Chevron | Chevron. Retrieved December 15, 2013,
Helman, C. (2013). Chevron: The World's Biggest Gusher. Forbes, 1-2.
